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Reducing Housing Costs in Philadelphia with Modular Construction

March 23, 2010 Down Town Club Philadelphia. Reducing Housing Costs in Philadelphia with Modular Construction. Funded by the William Penn Foundation. FixitPhilly.org BiaofPhiladelphia.com . March 23, 2010 Down Town Club Philadelphia.

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Reducing Housing Costs in Philadelphia with Modular Construction

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  1. March 23, 2010 Down Town Club Philadelphia Reducing Housing Costs in Philadelphia with Modular Construction Funded by the William Penn Foundation FixitPhilly.org BiaofPhiladelphia.com

  2. March 23, 2010 Down Town Club Philadelphia Reducing Housing Costs in Philadelphia with Modular Construction Karen Black, May 8 Consulting

  3. BIA and The When We Fix It Coalition 2004: BIA commissioned the report “If We Fix It, They Will Come,” setting out 10 actions to streamline the City’s development review process 2004-2010: Coalition of organizations has been meeting monthly with the City at the table to lower construction costs to a competitive level 2009: Began FixitPhilly.org

  4. BIA and the When We Fix It Coalition Building Industry Association of Philadelphia 10,000 Friends of Pennsylvania American Institute of Architects, Philadelphia Chapter Central Philadelphia Development Corporation Housing Alliance of Pennsylvania LISC Philadelphia Pennsylvania Environmental Council Philadelphia Association of CDC’s The Reinvestment Fund ULI Philadelphia Community Design Collaborative and American Planning Association, PA chapter, join in releasing this report.

  5. Market Values Too Low To Cover Construction Costs Construction Costs Are 18% Above US Average (4th highest of any major city) Home Sales Prices Are 40% Below US Average (3rd lowest of any major city) $$ • Construction costs can exceed market sales price • Subsidy becomes a prerequisite to building in the city • Deters investment in neighborhoods

  6. Philadelphia Construction Grew, Then Stopped

  7. Construction Costs Grew Faster in Philadelphia

  8. Modular Building 101 • Boxes built and inspected in factory with complete kitchens, bathrooms, windows, cabinets, flooring, carpets, and doors • Boxes shipped (no wider than 16 feet) • Boxes set on foundation and fastened • House is finished on site - facade added, utilities connected

  9. Methodology Goal: Objective price comparison between modular and stick-built construction in city and suburbs Issued RFI in Fall, 2009 to 4 contractors to build a 16-foot-wide and a 20-foot-wide rowhome using modular and stick-built construction in the city and the suburbs • Firms were told the bids were for a study • JKR Partners developed full architectural plans • Questions and answers shared with all firms • Assumed 12 houses of each type would be built

  10. Two Houses Selected for Study House 1: 16-foot-wide x 40-foot-long • standard size workforce housing for city • single box per floor House 2: 20-foot-wide x 40-foot-long • small marketable suburban home • requires construction and fastening of 2 boxes per floor

  11. Cost Comparison Results

  12. Modular Saves 20% for Urban 16ft Wide House Modular 16-Foot-Wide House Saves $32 Per Square Foot $22 per square foot average savings for two house types

  13. City Costs 18% More Than Suburbs City stick built house costs on average $37,000 more than identical house in suburbs On-site finish costs were on average $24,000 higher for city modular house

  14. Modular Savings For 16 ft Wide Suburban Home Modular saves in suburbs only when one modular box is used per floor

  15. Appendix and Alternate Features Report provides RFI’s, responsive bids, architectural plans and detailed specifications

  16. Choose Best Method for Each Project City development review agencies are comfortable with modular and stick built construction Stick-built offers the advantages of flexible design and higher local employment

  17. Modular Offers Sustainable Features Modular can create a more uniformly airtight building Modular creates shorter site disturbance Modular can be deconstructed and recycled Modular presents fewer indoor air quality issues

  18. Recommendations Educate developers, contractors and potential owners about modular single-family construction Attract a modular factory to the city or near its borders to further reduce the costs of modular

  19. Critical Time to Make City’s Housing Market Robust Competitively priced housing is critical to the City’s future 60-year population decline stopped Seek to attract 75,000 new city residents • Save 20¢ on the Dollar = Build 20% More publicly subsidized homes for low- and moderate-income families

  20. March 23, 2010 Down Town Club Philadelphia Reducing Housing Costs in Philadelphia with Modular Construction Funded by the William Penn Foundation FixitPhilly.org BiaofPhiladelphia.com

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